SFW Capital Partners closes $345M analytical tools fund

SFW Capital Partners has closed its second analytical tool investment fund. The fund hit its hard cap after 6 months of fundraising, giving SFW a $345 million kitty to invest in analytical tools companies.

Rye, NY-based SFW has carved out a niche as an investor in midsized analytical tools companies, a brief that has led it to back life science software players such as Essen BioScience during its 20-year history in the sector. The new fund will follow the same model as SFW's last vehicle, which made $10 million to $75 million equity investments in companies it viewed as having differentiated products and a foothold in their market. SFW then works with these companies to expand their operations. 

"Our specialized approach has enabled us to work collaboratively with strong managers to build significant value in the companies in which we invest," SFW partner Roger Freeman said in a statement. SFW works with analytical tools companies from across a range of industries, including life sciences. Having invested in Mettler-Toledo and Waters in the past, SFW added Essen BioScience to its portfolio 12 months ago.

Ann Arbor, MI-based Essen creates analytical instruments and software for cell-based life science research, a field in which it has signed up a who's who of top biopharma companies as clients. Essen lists Amgen ($AMGN), Genentech, GlaxoSmithKline ($GSK) and Pfizer ($PFE) among its customers. SFW now has the capacity to make up to 10 similar investments at an anticipated rate of one to three a year, The Wall Street Journal reports.

The plan represents a slight scaling up of SFW's activities, which in recent years have been based around the $300 million debut fund it closed in 2008. Having achieved some success with the 6 investments made by that fund, SFW was able to quickly blast past its $325 million target for the new vehicle.

- read the release
- here's the WSJ's take